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Thursday, September 17, 2020

TETHER RETURNS LOST FUNDS UP TO 1 MILLION USDT

 
 
 

    Tether, the largest stablecoin provider in the crypto currency ecosystem today, is a talking point in the crypto community, due to its system still using a centralized system.


This coincided with the move of Tether's CTO, Paolo Ardoino, to return a Tether coin totaling approximately 1 million USD to a group of Chinese traders who had sent the USDT to the wrong address.


USDT Refund to Trader

 

The $1 Million fund was lost after an anonymous group of Chinese DeFi users sent funds to a contract address linked to Swerve Finance, a fork platform of Curve Finance. The target address receives multiple stablecoins as a step to use the DeFi-based stablecoin exchange protocol. However, it turns out that traders don't get Tether instead.


After that there is confirmation that tokens that have entered into the Swerve Finance protocol cannot be issued. Then, Tether "freezes" the address, revokes tether delivery and receiving capabilities to the address and ensures no other tokens/coins enter the circulation. 


Community-Centered System Debate

 

The move by Tether is actually a form of "responsibility" to traders and opens a new perspective on the centralized system. This makes the debate in the crypto community. Because, the action shows that Tether is centralized and completely uncentralized. 


On the other hand, many people also argue centralization is not always bad. When viewed from this case, stablecoin Tether is a digital asset pegged to other assets with a US dollar value. The creation of this stablecoin to prevent major price changes on the entire crypto currency. This makes its value very influential on other crypto currencies. Moreover, the current distribution value reaches 14 billion USD and 2 billion USD in the combined value of other stablecoin options, such as USDC.


USDC, the USD-based stablecoin from Coinbase and Circle also uses a centralized system and has the ability to block addresses from transacting using USDC if needed.


Both Tether and Center, work closely with law enforcement officers to track illegal activity using their stablecoins. If there is activity that looks suspicious, it is certain that there will be a blocking at that address. 


This blocking and refund capability is actually at odds with the decentralized work ethic. But of course, the above case opens a new point of view regarding the positive side of the centralized system. 

 

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